New home loans slump in Victoria

Loans to build new homes slumped by 12 per cent in Victoria and 14.6 per cent in Tasmania in the three months to January 2013. The biggest increases in loan numbers were 8.4 per cent in South Australia and 5.3 per cent in Western Australia, according to Australian Bureau of Statistics seasonally adjusted figures. NSW loan numbers rose 1.6 per cent.

The Real Estate Institute of Australia said finance commitments were down for the fourth consecutive month – a sign buyers were not responding to rate cuts. “The decline in first-home buyers continues to be a major disappointment, remaining at 14.9 per cent for the second consecutive month," REIA president Peter Bushby said.

“This is the lowest since June 2004 and compares with the long-run average proportion of 20.1 per cent."

The Housing Industry Association said it would still take time for the rate cuts to affect finance levels.